Moody’s Analyst Ordered to pay $35 Million to SEC

Moody’s Investors ServiceDeep Shah, a former bond analyst at Moody’s Investors Service, has been declared a fugitive and is believed to be in Mumbai.

Shah is one of the 26 defendants criminally charged in the government’s insider trading investigation centered on Raj Rajaratnam, the hedge fund billionaire.

From NYTimes.com:

Federal authorities have accused Mr. Shah of leaking the news of two impending private equity takeovers to hedge fund traders: Hellman & Friedman’s acquisition of the software company Kronos and the Blackstone Group’s purchase of Hilton Hotels. As a Moody’s analyst, Mr. Shah would get advance word of the deals so the ratings agency could update its analysis of the company’s debt.

On Tuesday, a Federal District Court judge, Jed S. Rakoff, signed a judgment that ordered Mr. Shah to pay a $24.6 million civil fines, $1.76 million of interest and forfeit $8.2 million of illegal profits. But unless the authorities can track Mr. Shah down, it will be difficult for the government to recover this money.

A federal judge ordered Mr. Shah to pay the government $34.6 million related to the Securities and Exchange Commission’s insider trading lawsuit against him.

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